No deal Brexit would see consumer prices rise – retail group
The imposition of tariffs in the event of a no-deal Brexit will inevitably see consumer prices rising here, according to Retail Ireland.
Thomas Burke, director of the Ibec retail industry group, said the imposition of tariffs of up to 30 or 40% on some products couldn’t be absorbed by the retail industry.
The sector, he said, was operating on extremely tight margins of 3 or 4%.
“The challenge is what kind of Brexit we end up getting. The worst case scenario is a hard Brexit that brings WTO tariffs. If that happens, we’ll inevitably see increased costs in terms of the supply chain and increased consumer prices on certain products.”
He said retailers were increasingly preparing for such an outcome and were looking at diversifying the supply chain.
“You have to look at substituting products that would no longer be economically viable to stock. You have to see where the alternatives are locally or in continental Europe to ensure that consumers can get the products they want at a price they’re willing to pay.”
Thomas Burke was commenting as Retail Ireland published its latest monitor which examined the final months of last year, including the all important Christmas season.
“Overall, retail sales in the fourth quarter grew by about 2.7%. That’s pretty much in line with pre-Christmas targets for the sector,” Mr Burke said.
But the figure is masking some of the dynamics beneath the surface of the numbers, Retail Ireland says.
“What we are hearing from our members is that footfall in key shopping locations over the Christmas season was down considerably. That’s a worry in terms of the longer term sustainability of the sector and is further evidence of the move online by consumers,” he explained.
However, the industry is not under the same pressure as the UK retail sector where a number of big name brands have announced store closures in the last year.
“The dynamics of the Irish sector are very different. The UK retail landscape is challenged on a number of fronts. We’ve an economy that’s growing by around 7%. While that’s not being translated directly into performance by retail, the underlying fundamentals are much stronger,” Mr Burke said.
Article Source: http://tinyurl.com/kbwqb42